On Monday, the gold price rose near a seven-year peak. Then, investors flocked to the safe-haven metal on the mounting U.S.-Iran tensions. On the other hand, palladium exceeded the level of $2,000, hitting a record high.
Moreover, spot gold price surged 1.5% to $1,574.14 an ounce. Earlier in the session, it had successfully rallied to as high as 1.8% to reach $1,579.72. This had been its highest since April 10, 2013.
U.S. gold futures rose 1.6% to $1,577.20.
According to Benjamin Lu, an analyst at Phillip Futures, the geopolitics is invading the center-stage. He stated, “The Iran-U.S. tensions have escalated to a boiling point. That’s what has been pushing gold prices up.”
President Donald Trump on Sunday threatened sanctions against Iraq. And this occurred after Baghdad called for American and foreign troops to leave. The directive came amid an escalating backlash over the United States killing of a top Iranian military commander. As a result, these increased fears of a broader conflict.
Adding to the uncertainty, Iran explained it would abandon the limits on enriching uranium. This means it would take a further step back from commitments to a 2015 nuclear deal with six major powers.
Also, the market’s risk-averse sentiment underpinned the bullion. And this is usually an alternative investment during times of political and financial difficulty. Then, Asian equities moved away from an 18-month peak. Oil prices have soared on the intense Middle East hostility.
Lu said, “If it breaks the key resistance level of $1,585, it would lead to the key psychological level of $1,600.”
On Monday, investors also took stock of a private survey. It showed slower expansion in December in China’s service sector. And business confidence declined to the second-lowest on record, despite a pick-up in new orders.
Agri Commodities Prices
Meanwhile, soybean prices on Friday dropped by Rs 2 to Rs 4,360 per quintal in the futures market. At the same time, traders chopped down their positions amid weak cues from physical markets.
On the National Commodity and Derivatives Exchanges, the delivery of soybean in January contracts fell by Rs 28 or 0.64 percent. It is currently at Rs 4,360 per quintal with an open interest of 90,830 lots.
For February contracts, soybean delivery also went down by Rs 24 or 0.54 percent to Rs 4,380 per quintal with an open interest of 1,76,510 lots.
The easing of soybean prices was mostly because of the reduction of exposure by participants.
Then, refined soya oil prices slipped by Rs 8.8 to Rs 937 per 10 kg in futures trade. And speculators diminished holdings amid subdued demand in the spot market.
Furthermore, on the National Commodity and Derivatives Exchange, refined soya oil for January delivery fell by Rs 8.8 or 0.93 percent. It is currently at Rs 937 per 10 kg in 31,430 lots.
Contracts of refined soya oil for February declined by Rs 9.4 or 0.99 percent to Rs 935.6 per 10 kg in 53,570 lots.
According to some market analysts, cutting down of positions by participants against stocks mainly damaged the prices.